Consider what administration officials announcing the new exemption for medium-sized employers had to say about firms that might fire workers to get under the threshold and avoid hugely expensive new requirements of the law. Obama officials made clear in a press briefing that firms would not be allowed to lay off workers to get into the preferred class of those businesses with 50 to 99 employees. How will the feds know what employers were thinking when hiring and firing? Simple. Firms will be required to certify to the IRS – under penalty of perjury – that ObamaCare was not a motivating factor in their staffing decisions. To avoid ObamaCare costs you must swear that you are not trying to avoid ObamaCare costs. You can duck the law, but only if you promise not to say so.

As I have written about before, our company closed some California operations in December and laid off all the employees. As with most business closures, we had multiple reasons for the closure. The biggest problems were the local regulatory issues in Ventura County that made it impossible to make even simple improvements to the facilities. But certainly looking ahead at costs soon to be imposed due to looming California minimum wage increases and the employer mandate contributed to the decision.

So, did I fire the workers over Obamacare? If Obamacare were, say, 10% of the cause, would I be lying if I said I did not fire workers over Obamacare? Or does it need to be 51% of the cause? Or 1%? Or 90%. Business decisions are seldom based on single variables. I am just exhausted with having my life run by people whose only experience with the real world was sitting in policy seminars at college.

Update: The actual effect of this will not likely be to change business behavior, but change how they talk about it. Worried that there will be too many stories next election about job losses due to Obamacare, the Administration is obviously cooking up ways not to limit the job losses, but to limit discussion of them.

johnson85:

I think you buried the lede there. You're update covers the important part. While you're right that people in gov't are ignorant of how the real world works, they understand perfectly how abuse of power works. The goal of the certification is not to prevent layoffs, but to scare companies away from truthfully telling employees why they were laid off (or why their hours were cut).

teebor:

MingoV:

Just as businesses claim that age is never a factor in hiring (try getting hired to almost any white collar job when you are 55), they will claim that ObamaCare is never a factor in firings. I expect that many companies will issue newsletters describing their economic woes that will lead to lay-offs without mentioning ObamaCare.

MingoV:

Why pick on Harry Potter? That's been the norm almost everywhere for years. When I taught grad students, they were shocked when I told them that they were responsible for material in the textbook that I didn't cover in lecture. No one had done that before. JK Rowlings wrote about education reality; she didn't make that up.

The certification piece is insidious, as it could likely be claimed anytime around the new criteria, then prosecuted by the massively corrupt DOJ. It could be used against any business in this timeframe claiming this exemption.

This should be legally challenged. Again, the injury here is the changes to the law, not necessarily harm done under enforcement (fines, etc.) if it can be shown that these changes have put various businesses, with 101 or more employees for example, at a competitive disadvantage.

It may not change business behavior, but it will further suppress hiring around that 100 employee breakpoint, lest you have to let someone go, for ANY reason.

Officials said that any business claiming they are eligible for the new one-year delay because they have fewer than 100 workers must certify, under penalty of perjury, that it had not reduced its workforce merely to qualify for that exemption.

3rdMoment:

Thanks for the CNBC link! Still, there's nothing about this in the treasury press release, and the officials still aren't named or quoted directly, so I don't know if I completely believe this will happen.

Sounds like in your example, they can do this because SOX gives them explicit statutory authority. Where do they get authority for this new thing? Is there even a statute that makes it illegal to reduce your workforce in response to the mandate? Not that I've heard of.

Also I think there are legitimate questions about whether the administration has authority to selectively waive enforcement of the employer mandate at all. Perhaps employers who are treated less leniently will have standing to sue. Most large employers provide insurance anyway, and the others might not want the publicity. But if any small firms are sanctioned by this new requirement, I don't see why they might not win in court. But IANAL.

I wish I shared your skepticism as to the practicality of this aspect of the delay, but given past behavior of this administration, I do not believe they believe they need anything in writing – much less in the original law – to give them the authority to do this.

They can simply create a form, give it a government compliance number and they’re good to go. That is how this crowd operates.

And if DOJ gets wind you’ve laid some folks off recently and have crossed the 100 employee headcount threshold and filed this form, you’d better lawyer up, because then it’s he said/she said with Eric Holder, and he does whatever he wants.

I'll try to find the "officials" they're referencing, along with a press/rule release.

During the period beginning on February 9, 2014, and ending on December 31, 2014, the employer does not reduce the size of its workforce or the overall hours of service of its employees in order to satisfy the workforce size condition set forth in paragraph (1) of this section XV.D.6. A reduction in workforce size or overall hours of service for bona fide business reasons will not be considered to have been made in order to satisfy the workforce size condition. For example, reductions of workforce size or overall hours of service because of business activity such as the sale of a division, changes in the economic marketplace in which the employer operates, terminations of employment for poor performance, or other similar changes unrelated to eligibility for the transition relief provided in this section XV.D.6 are for bona fide business reasons and will not affect eligibility for that transition relief.

Craig L:

The thing is, though, that companies with 100 employees don't make the news when they cut jobs. It is only the Applebee's types that make news for this. So this regulation might not have a big effect on public view of Obamacare.